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Why banks aren’t offering four day weeks

According to an article in yesterday’s Financial Times, flexibility has proven a very welcome alternative to redundancy at KPMG.

In January, all 11,400 staff at KPMG UK were asked to volunteer for four day weeks or for 12 week sabbaticals on a third of pay. In an impressive display of enthusiasm, 85% put themselves forward. Only 750 were given the go-ahead.

Given the evident popularity of working less, why haven’t banks made similar offers to the thousands of staff they’ve let go?

The head of HR at one US bank says flexibility has been discussed at length.

“We’ve looked at letting people take August off, giving them one to three months to travel, or allowing them to work a four day week or a nine day fortnight,” he says.

Until now, he says there are three main reasons why flexible working hasn’t been on offer –

1.) Flexibility can be a byword for a pay cut – if people are working so hard that they can’t really cut their hours, you’re better off telling them straight that salaries are being reduced by 20%.

2.) Traders and investment bankers can’t really work flexibly anway.

3.) As an alternative, it has been possible to cut bonuses or remove mediocre performers.

However, flexible options may yet come into play if further cost cutting is required later this year.

“Say we have another blip in the markets in September or October and there’s a need to reduce spending,” says the head of HR. “If it then looks like we’ve bottomed out and things will subsequently get better, it will make sense to cut staff on a temporary basis only.”

Comments (11)

  1. I and most of my colleagues would love to work 4 days a week..at present we sit here trying to make 2 days work spread over the week !

  2. Are four day weeks the new Goldman Sachs?

  3. 85% wouuld say yes to a 4 day week or 3 month sabbatical? What a lazy, unamibitious bunch of low lifes. That statistic eptiomises the vast difference in quality between accountants and bankers.

  4. have done nothing for a year. theere’s only so much internet surfing i can do..still, i’m being paid handsomely.

    Dresdner Bank credit Reply
  5. dresdner bank credit –

    what you describe….what a waste of life. How depressing to spend your days like that.

  6. “i’m being paid handsomely.

    Dresdner Bank credit ”

    Um, no you’re not. You had your bonus clawed back by Commerzbank. You’re going to get your measly base and no / next to no bonus.

  7. Bankers are much too important to only work 4 days a week.

  8. Disillusioned MBA has recently found a job in the Middle East and has been working here in Abu Dhabi for a few weeks now. Disillusioned MBA feels like slitting his wrists.

    For those moaning about 4 days or having to surf the internet- count yourself lucky. At least you live in London- perhaps the world’s most cosmopolitan and happening cities. Work in the GCC countries make unemployment sound appealing.

    Disillusioned MBA Reply
  9. For higher rate tax payers, the marginal 20% income loss is taxed at 41%, so the impact on take home pay of a 20% paycut is only 12%. Against the standard 2 days weekend, an extra day is a 50%.

    12% paycut vs 50% more leisure time. On this basis it is a sensible choice for anyone fortunate enough to earn more than they spend with a life outside work.

  10. Back in the day when bankers made real money for their clients (as opposed to stealing it from them), we only worked three days a week, spread over five days. Flexible working was the norm – if you needed to be out of the office to meet a client at the club, or take a long lunch, or play golf, or visit your mistress, you just did it. Nobody cared as long as you brought the bacon home. Nowadays, we’re surrounded by imbeciles: despite having computers and huge hierarchies taking care of all the time-consuming parts of the job, they still need to sit at their desks staring into the middle distance for 16 hours a day before they get anything done. Most PAs at my firm have better time management and organisational skills than the VPs.

  11. I offered last year that instead of my redundancy I would take a 50% cut, and I was the best performer (albeit the most expensive) in the department.

    The HR and Exec incompetents didn’t even know how to deal with that and still let me go (although with a decent package).

    If the markets went down 30-50% it would only make sense that staff are offered pay cuts at that level (look at Henry – there is only so much arbitrage he can squeeze out of a day). There are no excuses not to offer that.

    I’ve always advocated for more variable pay – more bonus, less base – then, you’ll see how everyone starts working harder.

    Agree with MD. Too many VPs and Directors in the market without basic skills.

    Global_Citizen Reply

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